Uncovering authentic economic profitability behind corporate financial reporting
An audited balance sheet does not guarantee future cash flow resilience. We restate financial statements to isolate recurring Free Cash Flow and measure shock absorption capacity.
Balance Sheet Analysis · Normative Adjustments · Paris
Modern financial analysis does not accumulate generic ratios; it deciphers the exact mechanical conversion of accounting net income into unencumbered liquidity.
EBITDA Normalization
Eliminating non-recurring items, capitalizing implicit lease rents, and adjusting executive compensation to reveal true core earnings power.
Working Capital Integrity
Measuring seasonal working capital drifts, analyzing trade receivable aging, and identifying masked supplier payment stretch.
Normalized operating cash flow cascade
Reconstructing normalized operational cash flows
We dissect financial performance across three to five closed fiscal years to reconstruct the authentic operating cash flow cascade before and after working capital variations.
This methodology cleanly distinguishes self-funded organic expansion from debt-fueled growth masking progressive balance sheet fragility.
« Net income is an accounting opinion; unencumbered free cash flow is an indisputable financial fact. »
Four critical audit dimensions
Our diagnostic delves into four foundational areas to confirm balance sheet strength prior to any debt issuance.
EBITDA Normalization
Neutralizing exceptional subsidies, intra-group debt forgiveness, and standardizing depreciation policies.
Asset Quality Review
Critical review of accounts receivable recoverability, real inventory turnover, and goodwill impairment testing.
Maintenance vs Growth Capex
Rigorous segmentation between capital expenditures required to maintain core operations and discretionary growth investments.
Off-Balance Sheet Commitments
Exhaustive review of guarantees, operating lease obligations, factoring programs, and unfunded pension liabilities.
Our four-stage diagnostic workflow
Une exécution rythmée par des critères stricts de qualification et de structuration financière.
Data Aggregation & Normalization
Collecting complete certified financial packets, audit reports, and detailed accompanying disclosures.
Cash Flow Reconstruction
Calculating authentic operating cash generation and projecting normalized Free Cash Flow post tax and working capital.
Debt Service Coverage Testing
Computing DSCR and ICR ratios across baseline operations and mild stress scenarios.
Strategic Diagnostic Report
Delivering a clear executive report outlining residual borrowing capacity and balance sheet optimization levers.
Complementary expertise areas
Hipparchus Credit Assessment
Our proprietary scoring system qualifying institutional borrowing risk.
Modeling & Stress Testing
Forward-looking simulations under macroeconomic shocks and liquidity crunches.
Capital Structure & Leverage
Optimizing the debt-to-equity mix to minimize weighted average cost of capital (WACC).